Franklin Templeton launches smart beta Climate ETFs
Paris-aligned products to be listed on 31 July
Franklin Templeton has launched two smart beta ETFs compliant with the European Union's new Paris Aligned Benchmark (PAB), providing exposure to US and European equities.
The Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF and Franklin S&P 500 Paris Aligned Climate UCITS ETF, which sit within the firm's LibertyShares range, will be listed on the London Stock Exchange from 31 July, and will also be available on the Deutsche Börse, Borsa Italiana and other European exchanges.
Both portfolios, which will be fully aligned with the de-carbonisation goals of the Paris Climate Agreement, will be managed by head of global index portfolio management Dina Ting and ETF portfolio manager Lorenzo Crosato.
The ETFs will provide exposure to large- and mid-cap stocks in their respective markets, with the aim of reducing climate change risk and accessing opportunities in the low carbon transition.
Both will track a new Paris-aligned version of the STOXX Europe 600 and S&P 500 benchmarks, which will seek EU Climate Benchmark certification.
The indices will also aim to align with the climate disclosure recommendations from the Task Force on Climate-related Financial Disclosures.
Senior ETF product specialist Rafaelle Lennox explained Franklin Templeton collaborated with index providers S&P Dow Jones Indices and Qontigo on the new ETFs and "selected the key parent benchmarks that we believe are most relevant to our clients", S&P 500 & STOXX Europe.
She added: "Both index providers have partnered with carbon data specialists in the assessment of companies' climate change risk profiles, policies, targets and decarbonisation trajectory in the development of these technical and ground-breaking climate benchmarks.
"These Paris-aligned indices have ambitious carbon reduction targets but also meaningful broader environmental, social, and governance (ESG) components, thus, creating a core sustainable solution."
The ETFs have a total expense ratio of 0.15%.
Head of ETF sales for EMEA at Franklin Templeton Caroline Baron said the new launches will provide access to a "forward-looking investment solution at a very competitive cost of 15 basis points and will be the cheapest climate ETFs in the European market".
She added: "These new launches are an extension of our current sustainable investment offering within our strong line up of 16 smart beta, active and passive ETF strategies for European investors."
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